BILL NUMBER: SB 1524	CHAPTERED  09/30/00

	CHAPTER   1089
	FILED WITH SECRETARY OF STATE   SEPTEMBER 30, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 30, 2000
	PASSED THE SENATE   AUGUST 31, 2000
	PASSED THE ASSEMBLY   AUGUST 29, 2000
	AMENDED IN ASSEMBLY   AUGUST 24, 2000
	AMENDED IN ASSEMBLY   AUGUST 18, 2000
	AMENDED IN ASSEMBLY   AUGUST 7, 2000
	AMENDED IN SENATE   MAY 1, 2000
	AMENDED IN SENATE   APRIL 3, 2000

INTRODUCED BY   Senator Figueroa

                        FEBRUARY 17, 2000

   An act to add Section 12926.1 to the Insurance Code, relating to
insurance.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1524, Figueroa.   Insurance:  fines and penalties.
   Existing law requires the Insurance Commissioner to require from
every insurer in the state full compliance with the provisions of the
Insurance Code.
   This bill would require that any fines, penalties, fees, and costs
resulting from any matter involving compliance with or enforcement
of any provisions of the Insurance Code or other laws involving any
entity subject to the jurisdiction of the commissioner, be deposited
in the appropriate fund as provided by law.
   This bill would also provide that any funds ordered, or allocated
by a settlement, to be used for public outreach shall be subject to
specified limitations.  It would also authorize certain individuals,
a city attorney, a district attorney, or the Attorney General to
bring a legal action against the commissioner to enforce these
provisions.  It would require a court to order the commissioner to
pay damages out of nonpublic funds to any prevailing party in any
enforcement action arising out of a violation of the bill's
provisions.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 12926.1 is added to the Insurance Code, to
read:
   12926.1.  (a) In any matter involving compliance with or
enforcement of any of the provisions of this code or the other laws
of this state involving any entity subject to the jurisdiction or
authority of the commissioner, whether the matter is a formal
administrative accusation or adjudication, a formal or potential
judicial action, or other enforcement tool, and whether or not the
matter is settled or prosecuted to resolution, the use of any funds
that are imposed as fines or penalties of any sort, or collected by
means of settlement, or paid or reserved in any manner as a result of
the action, shall be subject to the limitations of this section.
   (b) Fines, penalties, fees, and costs shall be deposited in the
appropriate fund as provided by law.
   (c) Any funds ordered, or allocated by a settlement, to be used
for public outreach of any sort, shall be subject to all of the
following limitations:
   (1) The commissioner's name, likeness, or voice shall not be used
in any printed, audio, or visual material that is released either for
general distribution or to specific recipients unless a court finds
good cause to do so.
   (2) The message shall be limited to information relevant to the
enforcement action or compliance issues that generated the funds.
   (3) The primary focus of any public outreach where the purpose is
to advise members of the public of rights affecting pecuniary or
property interests shall be to provide specific information needed by
the affected persons to obtain or protect those rights.
   (4) No funds subject to this subdivision shall be used for general
education of the public about insurance issues, except to the extent
that the education relates to the type of violations that caused the
enforcement or compliance action, and otherwise complies with the
limitations of this section.
   (5) No funds subject to this subdivision shall be spent or
otherwise disposed of unless the expenditure or disposal has been
approved by a court of competent jurisdiction.
   (d) (1) This section may be enforced by an affected individual
with an interest in the matter or a policyholder of an insurer that
is a party to a settlement with the department, a city attorney, a
district attorney, or the Attorney General, who may bring an action
against the commissioner in the superior court in any county where a
violation of this section has occurred.
   (2) A court may issue injunctions or provide other equitable
remedies as appear to the court to be appropriate, and shall order
payment by the commissioner from nonpublic funds to a prevailing
party who has brought an action under this section of an amount
sufficient to compensate the party for all attorneys' fees, costs of
litigation, and expenses incurred in bringing and prosecuting the
action.  For the purposes of this section, "nonpublic funds" does not
include assets of an insurer or other party to a settlement that are
not part of a valid and voluntary settlement with the department or
commissioner.
   (e) The commissioner may not increase fees or assessments against
insurers in order to comply with this section.
